Labor Senators have today tabled a dissenting report in the Senate labelling the Government’s superannuation trustee governance legislation as “ideological” and “not backed by evidence”.
Labor agrees with the testimony of Mr Tom Garcia who is CEO of the Australian Institute of Superannuation Trustees and a member of the ASX Governance Council who said of the Bill:
“We oppose both its reach and its drafting. We absolutely oppose the abolition of equal representation and see it as a retrograde step for our superannuation system. Further, we dispute the stated objectives and question if in fact this bill will achieve them.”
The dissenting report has highlighted evidence from the Governance Institute of Australia, Mercer Consulting, the Australian Institute of Company Directors, the Australian Industry Group and the Association of Superannuation Funds of Australia who have taken issue with the definition of independence in the legislation.
It also questions the factual basis of the political intervention of APRA member Helen Rowell who was revealed in the course of the Inquiry to have been urged by the Assistant Treasurer to lobby crossbench Senators on the legislation.
There are five important reasons that Labor is opposing the Superannuation Legislation Amendment (Trustee Governance) Bill 2015:
- There is no evidence that independent directors produce better results for fund members.
- The current balanced representation model is working well, and delivering higher returns for members.
- APRA was given additional powers to monitor boards in June 2013.
- The proposed changes are too prescriptive and will restrict both employers and employees from electing their own board representatives.
- The proposed changes are estimated to cost up to $168 million, a cost that will be passed on to fund members.
The Senate should not pass this legislation which is nothing but an unnecessary and poorly-conceived ideological crusade against high-performing representative super boards.